Applied Value Investing: The Practical Application of Benjamin Graham and Warren Buffett's Valuation Principles to Acquisitions, Catastrophe Pricing and Business Execution

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McGraw Hill Professional, Jul 24, 2009 - Business & Economics - 304 pages
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Since Benjamin Graham fathered value investing in the 1930s, the method of analysis has spawned a large number of highly successful investors, such as Graham’s own former student and employee, Warren Buffett, who is regarded as one of the most successful investors of modern times.

Over the years, numerous books have been published on Benjamin Graham’s approach. Most of these books present different interpretations of value investing and are generally introductory based. Until now, there has not been an advanced hands-on guide for investors and executives who may want to apply the powerful value investing discipline outside of stocks and bonds.

Applied Value Investing takes the same time-proven approach Graham introduced with David Dodd in their 1934 masterpiece, Security Analysis, and extends it in a variety of unique and practical ways—including mergers and acquisitions, alternative investments, and financial strategy.

This in-depth guide shows financially sophisticated readers how to use value investing in a macroinvesting framework and how to apply it to the emerging area of super catastrophe valuation. It illustrates how to put value investing to use with case studies on:

  • Eddie Lampert’s acquisition of Sears
  • Warren Buffett’s acquisitions of GEICO and General Reinsurance Corporation
  • The recent “new economy” boom and bust, and its aftermath
  • The underwriting of the Pepsi Play for a Billion sweepstakes

Applied Value Investing also demonstrates how to incorporate the cornerstones of valuation into an integrated business framework that can be used to assess and manage a franchise (or a firm operating with a sustainable competitive advantage).

In addition to its cutting-edge applications of value investing principles, Applied Value Investing sets itself apart by drawing on material published in leading academic journals to form the foundation of its presentation. However, value investing is inherently practical, and this comprehensive resource provides helpful guidance for successfully implementing value investing strategies in the real world.

To profit like the masters you have to think like them. Applied Value Investing can open new doors to value creating opportunities.

  

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Contents

Chapter 1 The Basics and BaseCase Value
1
Chapter 2 BaseCase Value and the Sears Acquisition
21
Chapter 3 Franchise Value and the GEICO Acquisition
41
Chapter 4 The Gen Re Acquisition and Franchise Risk
65
Chapter 5 Macroanalysis Opportunity Screening and Value Investing
109
Chapter 6 A Graham and DoddBased Approach to Catastrophe Valuation
159
Chapter 7 Financial Strategy and Making Value Happen
179
Conclusion
201
Resources
223
Endnotes
231
Index
265
Copyright

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About the author (2009)

Joseph Calandro, Jr., is the enterprise risk manager of a global financial services firm. He previously taught value investing and risk management courses in the MBA program at the University of Connecticut and worked as a financial management consultant with IBM Global Services.

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